Reforms ensure it isn’t only insurers set to make gains

The Dean of the Faculty of Advocates claimed on these pages that it is not obvious who would benefit from the change to the “privative limit” proposed in the Scottish Government’s draft Courts Reform Bill (March 4).

Richard Keen suggested perhaps only insurers, such as myself. I hesitate to argue with the dean, but it is important to point out that this is a much-needed reform that will benefit almost everyone involved in personal injury cases.

The overriding fact recognised in Lord Gill’s review of civil justice is that we need to improve a system in which justice has taken too long and cost too much. The time taken to settle cases and the growth of legal fees that overshadow the sums awarded to pursuers are both unacceptable.

The Forum of Scottish Claims Managers represents the claims-management operations of many leading insurance companies. We welcome the Scottish Government’s proposals and echo Cabinet Secretary for Justice Kenny MacAskill’s comment that “a fairer system of litigation is at the heart of the reform plan”. The civil courts system needs to become faster, more efficient and less expensive for consumers to have access to fair and proportionate justice in injury cases.

The dean rightly cites access to justice and equality of representation as important principles, but the volume of personal injury cases before the Court of Session means that there is currently a considerable delay in accessing justice.

This is compounded by the legal costs involved. We researched litigated cases settled by our members throughout 2012. The sample comprised 3,482 road traffic accident and accident-at-work cases – just over half of the Court of Session and sheriff courts caseload.

Our analysis revealed that in 52.4 per cent of cases with a compensation value to the pursuer of up to £15,000, the payment to the pursuer’s solicitors was greater than the award to the pursuer. In these cases the “sum sued for” ranges from £5,000 to £400,000, with an average of £42,000. Our research shows that in compensation claims where damages are £10,000 or less for road traffic accident injuries, workplace accidents or other injury accidents pursued through the court system, for every £1 of compensation the injured party receives from our members, a further £1.10 is paid out in legal fees to the solicitors or legal representatives of the injured party.

This highlights the disproportionality that exists within the present system, the cost of which is currently met by consumers and businesses, which have to pay higher insurance premiums.

The Scottish Government’s reforms have the potential to reduce the cost of insurance for customers as well as the cost of their legal fees.

The cost of car insurance, for example, has risen significantly over the last ten years. Premiums have been rising faster than the retail price index. This has not been insurance company profiteering. In fact, as the Association of British Insurers points out, motor insurance has not been profitable since 1994.

Increasing the privative limit from £5,000 to £150,000 is a big step, but it is one which is necessary because it has the potential to improve access to justice and a faster resolution of cases. That is a strong incentive for reform.

Scots law has a very well-qualified and experienced body of solicitors and solicitor advocates specialising in personal injury law and, as the Justice Secretary has pointed out, litigants may seek sanction for counsel to appear in the specialist sheriff court for personal injury cases.

The draft bill has provisions to remit proceedings to the Court of Session in exceptional circumstances, but these would be based on the principles of a case rather than on an ambitious sum sought.

Keeping the privative limit at its current level would maintain personal injury cases as the preserve of the advocate in a court where the fees for legal representation more often than not exceed the sums awarded, in lower-value cases, and cases take much longer to settle due to the pressure on the time of the court.

The Scottish Government’s reforms promise a better service, faster resolution, and a fairer balance between costs and awards. That surely benefits all parties, not only insurers.

• Alan Rogerson is chairman of the Forum of Scottish Claims Managers